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43RD ANNUAL REPORT - 2012
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“Passion is what makes us do extraordinary things, to discover, to challenge
ourselves. Passion is and should always be the heart of courage.” - Midori Komatsu
Alberta pork producers know this only too well. Passion drives them to invest the time, energy and
money to produce the finest pork in the world. Passion emboldens them in the face of conditions
beyond their control. And courage sustains them where others may falter.
It is the same passion that drives Alberta Pork to work diligently in representing the interests of 350
producers across the province. From family farms to large scale production groups, our producers vary
in size, scope and structure, but they share a common vision: To produce safe, high quality pork in a
sustainable environment.
In doing so, they create jobs and a substantial economic boost for their communities, paving the way
for the next generation of producers to carry the torch.
As a not-for-profit organization governed by an eight member Board of Directors, Alberta Pork’s role
is to support producers in reaching their goals. As an entity created by producers, elected by
producers and funded by producers through a levy system, our mandate is to promote the many
benefits of Alberta-grown pork to consumers while advocating for producers with all levels of
government.
The regulations governing our organization are established through the Alberta Pork Producers
Marketing Plan, which is enabled by the Marketing of Agricultural Products Act in the Province of
Alberta. This is the same act that allows the establishment and existence of more than 16 Marketing
Boards and Commissions in Alberta.
While our producers face a number of challenges to their viability, many of the key ingredients for a
prosperous and growing hog industry are right here in Alberta: Excellent genetics, sound
infrastructure, access to export markets and one of the smallest hog densities in the world.
Against this backdrop, Alberta Pork directors and staff remain committed to serving our members
with the same integrity, pride and passion that empowers producers as they seek to build a better
future for themselves, their families and their communities.
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Alberta Pork Board of Directors - Spring 2012
(Back Row (L to R): Jacqueline Hamoen, Will Kingma, David Hospers, Andy Vanessen,
Marcel Rupert, Mark Wipf, Darcy Fitzgerald; Front Row (L to R): Frank Novak, Jim
Haggins)
Note: Following the elections in June 2012, we welcomed new directors Martin Bowman and Ard
Bonthuis (not pictured here) to the board and said farewell to outgoing Chairman Jim Haggins
and Director Mark Wipf. Frank Novak was elected as the new Alberta Pork Chairman.
Our Mission: Serve and represent pork producers to enhance prosperity
within their communities.
Our Vision: Stimulate change to help create growth and a positive outlook for
future generations.
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Chairman’s Report
This summer the producers of Alberta and the directors of Alberta
Pork honoured me with the opportunity to serve as Chairman of the
Board along with Vice Chair Will Kingma, Treasurer Andy Vanessen
and directors David Hospers, Jacqueline Hamoen, Marcel Rupert,
Martin Bowman and Ard Bonthuis.
On behalf of the Board and all Alberta pork producers, I would like
to thank Jim Haggins who has served as your Chairman for the last
two years. During that time, Jim has been a tireless advocate for
our industry, earning the respect of producers, politicians and industry members across Canada. I also
want to mention the contributions of outgoing Board member Mark Wipf who I had the pleasure of
sitting next to at the Board table. Mark’s thoughtful insights on the role of the Hutterite community in
our industry made the Board a more productive group.
The year 2012 has already proven to be another round of highs and lows for our industry. Early this
summer we felt that we were looking at rebounding hog markets and the possibility of a bumper crop
on the Prairies; two events that the survivors of the past five years have anticipated, even dreamt of,
eagerly. Since then the rain stopped in the Midwest and came too often to parts of the Prairies and
the dream became another nightmare as our feed cost soared and hog prices crashed in response to
panic marketing of hogs in the U.S. By some estimates, the drop in margin over feed costs from July to
September was over $70 per hog and for a short time in September revenues were not large enough
to cover feed costs for many producers.
The result of this drought-induced disaster is that once again our industry is facing the loss of more
producers and more hogs. The weakened balance sheets resulting from our previous losses mean
there is little room to maneuver as we face another round of increasing debt or exit from the industry.
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Prices are slowly recovering but feed costs on the prairies at least are staying strong and feed grains
are becoming increasingly difficult to procure as profitable grain producers seem reluctant to sell. The
outlook for next year is unclear but those who do survive will have suffered losses that will take years
to recoup.
This crisis has underlined the need to ensure that government and our industry partners understand
our challenges and will work together to find a long-term, sustainable solution. While we have had
some good conversations with our provincial government, it seems that their federal counterparts are
unwilling to acknowledge that our current suite of programs will not provide adequate coverage for
many in our industry. It appears that at this point in time the survival of those producers who are
most at risk has taken a back seat to the mantra of “fiscal responsibility” and we continue to be told
that we should have done a better job of managing our market risk and that we need to find a way to
do things differently.
Competitiveness Issues
Our industry faces several challenges in terms of long term competitiveness and prosperity.
First, we need to find a way to work with the rest of the pork value chain to make sure that we have
revenue parity with our major competitors in the US. This comes first in the form of prices paid for
our hogs but also ensuring that product which does not meet Canadian production and safety
standards is not allowed to be dumped in our market and depress pork prices here. Our retailers
need to become our partners in this rather than being opportunistic buyers with no view to impacts
on our local value chain.
Second, we need competitiveness in terms of costs for our inputs and regulatory burdens being
placed on our industry. This includes things like labour cost and availability which continues to be a
major issue for our producers. Additional costs threaten our industry in the form of demands for
changes in our production systems to address perceived requirements of our customers. The
proposed new code of practice contains many items which will serve to increase our costs. It is time
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for the rest of the value chain to contribute something other than demands, as producers are unable
to bear the burden alone every time a change is requested.
Third, the current situation illustrates the need for us to develop better risk management tools and
strategies. Misguided government policies around the world have created a tradeoff between food
and fuel that will only serve to increase the volatility of the world we operate in. We have seen clearly
this year the results of a production shortfall when a large share of each crop is dedicated to
producing fuel and those fuel producers can afford to pay prices that producers cannot. The US crop
shortfall hurt us in terms of both revenue and cost. In order to be competitive, Western Canadian
producers need access to the same risk management opportunities on the input side that our
competitors in the US have.
I want to conclude by saying that the stress of our current situation has made it clear to me that we
have some great people in our industry. I am amazed by the remarkable resilience of our producers
across the province. While some outside our industry interpret this dedication and willingness to fight
for survival as an indication that things must be ok, I see it as a reflection of the quality of people who
raise hogs and produce pork here in Alberta. Ours is still a major industry. Our numbers have
continued to drop, but the producers who remain are dedicated, resourceful and very good at what
they do.
Thanks in part to Alberta, our country is one of the world leaders in high quality pork exports with
$3.2 billion in annual sales to 143 countries. Nationally, there are 70,000 jobs and an economic impact
of about $9 billion per year associated with our industry. In Alberta, our industry supports thousands
of jobs and millions of dollars of economic activity. We need to continue to find ways to make these
facts known to our consumers and politicians, especially those in urban areas.
We will continue to do everything in our power to support producers and help them prosper for the
benefit of their families, their communities and future generations.
Sincerely,
Frank Novak
Chairman
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Executive Director's Report
It was another rollercoaster year for our industry, with some
significant dips in revenue. Feed grain prices did the opposite and
skyrocketed, costing producers on average another $22/pig in 2012
as compared to 2011. Simply put, this combination of expenses
and revenue is not sustainable and will significantly impact the
entire value chain. A change in our way of doing business is a must
to secure a future for those most affected: The pork producer and
the packer. A more profitable future can only happen if we
embrace change and partner within the value chain.
There is no silver lining. Current government programs, such as Agri-Stability, Agri-Invest, Agri-
Recovery or the Advance Payment Program, exist as they were originally developed, and the
government has indicated that no changes will be made. Alberta Pork and the Canadian Pork Council
have discussed at length with federal and provincial governments, the weaknesses in the programs as
they relate to the pork industry.
Alberta Pork has moved forward on a number of the key objectives and goals as outlined in our
strategic plan, which was presented at last year’s Annual General Meeting. The “Bottom line” is that
we will do whatever it takes to fulfill our number one mandate: Supporting Alberta pork producers.
Having said that, what have we accomplished under our three key objectives?
I. Create an Environment of Profitability for Producers
At times, this objective has been as much about mitigating losses as generating profits, but the
underlying goal remains the same: producer sustainability. To that end, we have pursued a number of
avenues that impact the bottom line.
The launch of our three-year Cost of Production (C of P) Pilot Project has provided some key data to
better understand production costs and identify potential savings. To date, we have obtained data
from 23 participants and will be looking to include more participants over the coming months.
At this point, we are seeing an average C of P at $167.27/hog marketed in 2011 with a range of
$193.87/hog to $139.91/hog when comparing the highest 25% and the lowest 25%. In 2012, we have
calculated an average C of P at $189.38/hog marketed. The major expense difference was the cost of
feed. In comparison to the US, we saw a swing from approximately a $1/hog advantage in Alberta in
2011 to about a $14/hog advantage in the Midwest US in 2012. In a significant drought year does that
mean they have better business risk management options, such as contracts on supplies and services,
to mitigate fluctuations in production costs?
Moving forward, Alberta Pork will seek opportunities for producers to gain more information on
business risk management tools, while looking to enhance tools and build new ones to help producers
navigate the volatile marketplace.
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We realize that the packing industry must also be viable but we still feel that the revenue issue must
be addressed, as our competitors have an advantage on that front as well. The pigs may not be
shipped into our marketplace but the pork certainly is, and at prices that are harmful to sound
economics for all while giving a false sense of reality to the Canadian consumer. This needs to be
addressed in a manner that gives a positive outcome to both Alberta producers and the packers they
have a business relationship with. The key is a new attitude for a new model, one in which we
succeed together rather than at each other’s expense or peril.
As the administrator of the Alberta Hog Feeders Association, we have been working with the
Agriculture Financial Services Corporation (AFSC) on expanding the AHFA to provide another avenue
for producers to access operating capital. We are hoping to elevate this program from the current $5
million to the $25 million level over time, enabling us to help at least 40-50 producers through this
effort. We feel confident that with strong financial support, the Alberta pork industry will be wellpositioned
for the long-term.
Our proactive approach to the Growing Forward programs enabled producers to submit their
applications on time and access much-needed funding for a variety of projects including animal care,
food safety, energy efficiency and business management. Alberta Pork worked with Growing Forward
staff at Alberta Agriculture and Rural Development to assist producers with their applications, of
which 60 were approved for a total of $650,000 in funding. The process was very smooth and the
projects were beneficial to producers.
Enhancement of the pricing information on our website has been somewhat slow but we are hopeful
that more will be accomplished over the next year. Our commitment to weekly updates via
information provided by Phoenix Agri-Tec was the first step in providing a variety of market
information. The addition of BRM comparisons will be the next step in the new year.
Given the impact of labour on profitability, Alberta Pork joined forces with a broad spectrum of
agricultural industries to form the Agriculture Industry Labour Council of Alberta (AILCA). The group’s
goal: To address the labour challenges faced by producers, provide a united voice for the industries
and offer a channel to communicate with government both provincially and federally. A few
individuals over the past year have done a great deal to address our industry labour issues and their
efforts are very much appreciated: Special thanks to Jim Haggins (past Chairman of Alberta Pork),
Mark Chambers (Sunterra Farms Ltd.) and Marvin Salomons.
II. Develop the Most Informed and Engaged Industry
Since communication is a two-way process, we’ve adopted a two-pronged approach, providing
producers with information while taking every opportunity to hear their concerns and suggestions.
The recently concluded biosecurity training was a huge success, thanks largely to assistance from the
Canadian Swine Health Board and Growing Forward. A total of 313 producers completed the
program, gaining valuable knowledge on proper biosecurity procedures to safeguard their animals
and their business. In addition, producers were eligible for $650 plus the services of an on-farm
veterinarian visit to work through the biosecurity options and the CQA/ACA validations.
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Approximately 98% of producers are now registered on ACA and CQA, and we’ve made great strides
in reassuring consumers about the safety of Alberta-grown pork. However, striving for 100%
enrollment on the CQA program is our goal, as the weakest link in the system will cause the greatest
damage to our industry. It is important that this standard is maintained at both the federal and
provincial processing level for the overall good of the industry.
Improvements to our website and the addition of a message board provided additional outlets for
communicating to and between producers. Our upgraded labour section walks producers through the
entire application process for temporary foreign workers and we’re constantly updating this area to
reflect changes to labour rules and regulations. We are currently developing an E-Newsletter and a
webinar series to increase both the quantity and quality of information we deliver.
Most of our regional meetings in June were well-attended and produced some important dialogue on
key issues. Expert guest speakers offered insights on new research, risk management and on-farm
practices to boost efficiency.
Alberta Pork is in existence to listen to and support Alberta pork producers. If you have issues,
concerns and suggestions we are open to your opinions. So please contact us.
III. Build Strong Relationships with Industry Partners
With funding from the Alberta Livestock & Meat Agency (ALMA), we kicked off an ambitious domestic
awareness initiative called “Passion for Pork” to showcase the quality and versatility of Alberta-grown
pork. Response to the Passion for Pork campaign has been outstanding, with widespread interest
from restaurants and consumers. We have approached ALMA for support for Phase II of the project
which will include processors and retailers.
Passion for Pork is more about engaging the parts of the value chain through consumer awareness
then it is about marketing a specific pork product. We have a system that is broken. It has distinctive
and separate parts that do not have a history of a good relationship. Our aim is to break through this
in somewhat of a different approach so that all find benefit and trust. Passion for Pork can be that
glue. Marketing and sales are the measures of true success in changing our overall relationship and
current value chain model.
While there are no magical cheques flowing from the government to address hardships caused by the
drought in the US, we continue to have a good relationship with the provincial government. This past
year saw changes at the helm of the provincial agriculture ministry. The new Minister of Agriculture
and Rural Development, the Honorable Verlyn Olson, has met with members of the board and staff on
a number of occasions to establish a good working relationship. We certainly appreciate the
Minister’s willingness to meet and work with us. In addition, Deputy Minister John Knapp and his staff
have been very helpful on a number of fronts, including assistance through Growing Forward,
emergency planning, animal care, traceability, labour issues, environmental practice and policy, etc.
As well, we appreciate the efforts of Brad Klak, President of the Agriculture Financial Services
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Corporation, and his staff as they help producers with business risk management tools like the Hog
Price Insurance Program, and look to expand the Alberta Hog Feeder Association. Thanks also to
Gordon Cove, CEO of the Alberta Livestock and Meat Agency (ALMA), and his staff for their invaluable
support on a few key projects underway at Alberta Pork. With future ALMA support, we will be able to
address a number of important issues including economic issues facing the industry. Our ability to
dialogue with consumers and others in the supply chain will be critical to any overall change in the
future.
Speaking of partners, let me take this opportunity to thank some of the many organizations that have
collaborated with Alberta Pork for the betterment of producers and the industry as a whole: The
Intensive Livestock Working Group, the Agriculture Industry Labour Council, Taste Alberta, the
Canadian Pork Council, the Canadian Swine Health Board, our fellow provincial associations and other
provincial commodity organizations that we are fortunate to work with.
IV. Corporate Excellence
Alberta Pork is focused on maintaining a high degree of corporate excellence and professionalism in
everything we do, to act in a transparent and accountable manner, and to operate with the best
intentions for our producer members. Last year the board developed a very good strategic plan that
was presented to industry, and Alberta Pork is on track with that plan.
Part of our role is to ensure sound policies are developed for the good of all pork producers and to
ensure that regulatory issues are covered off. Over the last year we have been working on positioning
Alberta Pork as the provincial Delegated Authority for the Swine Traceability Regulation so that this
process can be handled in the smoothest manner possible. Through the Intensive Livestock Working
Group we have addressed a number of significant environmental issues. We continue to review and
express opinions on pending changes to the Codes of Practice, labour rules, business risk management
tools, etc.
Over the last two years, we have also made a number of changes to the structure and operations of
Alberta Pork including; allowing for mail-in ballots during elections, the removal of the delegate body,
and a refundable levy process. On occasion we are even somewhat annoying with regards to levy
requirements of our producers and packers. There is a regulation that makes payment a requirement
and Alberta Pork has a responsibility to enforce that regulation and to be fair to all producers. At the
end of the day, pork producers in Alberta have the right to ask for their levy back each year in May;
however, with that right also comes the requirement to first pay the levy.
In the spring of 2012, former Alberta Pork Chairman Jim Haggins and Director Mark Wipf completed
their terms. Their commitment and dedication were greatly appreciated. In their place, Frank Novak
assumed the Chairman position and we welcomed two new directors - Martin Bowman and Ard
Bonthuis - to the board.
Pushing On… 2013
We recognize that there are many stresses and challenges for our producers and their families.
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Alberta Pork will work hard to continue to support and represent our producers, focusing our
initiatives on understanding and reducing costs of production and improving revenue streams onfarm.
Fulfilling our promise to producers is an ever-evolving process as we adapt to changing industry
conditions and a volatile marketplace; however, our commitment to those who pay the bills is
unwavering. That also means we need to face the truth and at times do things differently and more
aggressively to serve the best interests of those who pay the bills: Our producers.
In 2013, the markets might be somewhat better. However, we can’t let that distract us from the need
to take a different approach to our relationship-building, one that shines the spotlight on producers
and places them front and centre in the minds of consumers. We have a great product that people
love but it isn’t sustainable with the current model; therefore, we need to change the model by
reducing costs on the farm through incremental cost savings improvements and supportive
opportunities while improving the revenue side of the equation.
This statement has been made many times in the past but perhaps the timing wasn’t right. The timing
is right today for the producer and the packer to truly work together to ensure success for both. It is
up to us to solve our industry problems together and it is up to us to re-engage the consumer who
wants high quality, great tasting, Alberta pork. This is a great industry, with great people and a great
product. Now it’s time to reignite the passion for success… That is the “Passion for Pork”.
Thank you to our entire board and dedicated staff for their ongoing efforts to support producers and
drive meaningful change for our industry.
Respectfully Submitted
Darcy Fitzgerald
Executive Director
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Alberta Pork Directors
Frank Novak, Chairman
Martin Bowman, Director-at-Large
Andy Vanessen, Director – Region 1
Ard Bonthuis, Director – Region 1
Marcel Rupert, Director – Region 2
Will Kingma, Director – Region 2
Jacqueline Hamoen, Director – Region 3
David Hospers, Director – Region 3
Alberta Pork Staff
Darcy Fitzgerald - Executive Director
Marilyn Griesheimer - Office Manager
Charlotte Shipp - Industry Programs Coordinator
Christina Carley - Education Program Coordinator
Barb Brimmage - Administrative Assistant/Reception
Geoff Geddes - Communications Coordinator
Audrey Cameron - Animal Care & Quality Assurance Coordinator/Specialist
Alberta Pork Office:
4828 89 Street
Edmonton, AB
T6E 5K1
Phone: 1-877-247-PORK (7675)
E-mail: info@albertapork.com
Websites: www.albertapork.com; www.passionforpork.com